Insights from IAA Mobility 2025: Chinese electric car makers challenge the European market
A brief visit to the IAA Mobility international auto show in Munich in September offered valuable perspectives on the current opportunities and challenges facing the global automotive industry, especially for European manufacturers. The event underscored the growing contrast between Europe’s established car companies and the rapidly rising influence of Chinese automakers.
Overview of exhibitors at the IAA Mobility
Total exhibitors: Around 750 companies from more than 30 countries participated.
European manufacturers: The actual number of car brands and OEMs (Original Equipment Manufacturers) was quite limited. In their place were suppliers and companies providing technology solutions for communication and data.
Direct presence of Chinese OEMs: Several Chinese car manufacturers (including BYD, NIO, Xpeng, Leapmotor, Chery (with Omoda and Jaecoo), Chongqing Changan Automobile (with Avatr and Deepal), and Aito) had a strong presence at the show.
The prominence of brands like BYD and Xpeng at the show, occupying some of the most coveted exhibition spaces, unmistakably signaled a pivotal shift, Chinese manufacturers positioning themselves as global challengers to their European counterparts.
Electrification and AI: The main themes
Two clear trends dominated the discussions and displays at the show: electrification and advanced technology, especially AI.
Focus on electric vehicles
Electric Vehicles (EVs): Electric mobility was at the heart of the show. European brands like Volkswagen, Mercedes-Benz, and BMW unveiled new electric concepts and models to compete with the influx of Chinese EVs.
- Volkswagen’s “Electric Urban Car Family” features several models from VW, Skoda, and Cupra.
- BMW’s “Neue Klasse” was introduced, starting with the iX3, emphasizing high-density batteries and sophisticated digital interiors.
- Mercedes-Benz Concept CLA also made a major debut, showcasing a new platform designed for efficiency and extended range.
AI and software integration
AI and software features: Artificial intelligence is now deeply embedded in next-generation vehicle systems. Notable advancements included:
- Advanced Driver Assistance Systems (ADAS): With new EU requirements mandating such systems in all new vehicles, suppliers like ZF and others showcased AI-powered solutions for lane keeping, adaptive cruise control, and predictive maintenance.
- Smart cockpits and infotainment: Chinese brands stood out in this area, presenting cutting-edge infotainment, integrated smart cockpits, and user-focused designs that are reaching the market faster than ever.
- Autonomous driving: Companies specializing in self-driving technology, such as DeepRoute.ai and Horizon Robotics (which announced a new European headquarters), demonstrated AI-driven solutions for urban ADAS and future autonomous capabilities.
Conclusion: Europe faces a new reality
European carmakers are no longer the clear leaders, as Chinese companies increasingly set the pace in automotive innovation and mobility.
IAA Mobility 2025 confirmed the shift: Chinese players are taking the lead in the industry’s development.
One example of how Europeans are adapting is Volkswagen’s “In China for China” strategy, as profitable exports to China become a thing of the past, with local manufacturers offering highly competitive pricing.
Meanwhile, partnerships with Chinese suppliers, especially in battery technology, are becoming ever more essential. BMW, for instance, has improved battery efficiency with help from leading supplier CATL.
Though the number of Chinese manufacturers at the event was still relatively small, the trend is unmistakable: they are poised to secure a significant share of the European market in the coming years, regardless of tariffs.
